The Home Protection Scheme (HPS) is a mortgage reducing insurance that insures CPF members and their families against losing their homes in the event of death or permanent incapacity before their housing loans are paid up.

 

HPS will give you protection up to age 65 or the end of the loan period, whichever is earlier. In the event of permanent incapacity or death, the CPF Board will pay up the outstanding housing loan if you are covered for the full housing loan so that your family can keep the flat. Otherwise, the Board will only pay up to the amount you are covered for.

This article will give you all the information you need about Home Protection Scheme (HPS).

Do I have to be insured under HPS?

You have to be insured under HPS if you are using your CPF savings to pay your monthly housing loan instalments on your HDB flat.

However, if you have private life insurance or mortgage insurance that is sufficient to cover your outstanding housing loan, you may apply for exemption from HPS.

The above also applies if you are paying the housing instalments under Public Housing Scheme (PHS). HPS is optional only if you use cash to pay your monthly housing instalments.

HPS does not cover private residential properties, such as executive condominiums (ECs) or privatised Housing and Urban Development Company (HUDC) flats.

When will my HPS cover start?

Your HPS cover starts when you meet all of the following conditions:

  • You are the legal owner of the flat.
  • You have completed the loan application with HDB or the approved mortgagee and are now legally responsible for the loan.
  • You have made your health declaration which is accepted for HPS coverage.
  • You have paid the first HPS premium.

How much must I be insured under Home Protection Scheme (HPS)?

Your share of the HPS cover should at least match the proportion of the monthly housing instalment which is payable with your CPF savings and/or cash.

  • If you are the only person paying the monthly housing instalments, you should be insured for 100% of the loan.
  • If you are paying 80% of the monthly housing instalments, and your co-owner the remaining 20%, you should be insured for 80% of the loan and your co-owner should be insured for 20%.

For example, if your monthly housing instalment is $ 1,500. You are using $1,000 from your CPF and $200 cash, while your co-owner is paying $300 from her CPF to service the loan.

  • Your share of the cover should be at least: $1,200 / $1,500 x 100% = 80%
  • Your co-owner’s share of the cover should be at least: $300 / $1,500 x 100% = 20%

Note: The total share of the cover per household should add up to at least 100%.

What are the exclusions for HPS claims?

Members will not be able to claim under HPS in any of the situations below:

  • Permanent incapacity before the commencement of their HPS covers.
  • False or misleading information provided when applying for HPS.
  • Cases of self-inflicted injury or suicide within the first policy year of the HPS cover.
  • Permanent incapacity or death arising from wars/any war-like operations or participation in any riot.
  • Cases of a criminal offence punishable by death within the first policy year of the HPS cover.

How long am I covered under HPS?

New members insured under HPS will be covered under Annual Premium (AP) up to 65 years old or until your housing loan is paid up, whichever is earlier.

For members insured under HPS before 1 March 2001, your Single Premium (SP) HPS will cover you up to 55 or 60 years old, depending on when you joined the scheme. This is stated in your SP certificate.

The Board will extend an AP cover when your SP cover has expired and you still have an outstanding housing loan. The issuance of AP cover is subject to premium payment.

How long do I need to pay the HPS premium?

You will only need to pay an annual premium for 90% of your HPS cover period. For example, if your HPS cover period is 30 years, you will only need to pay the premium for 27 years.

How can I pay the HPS premium?

The annual premium will be deducted automatically from your CPF Ordinary Account (OA) to renew your cover. HPS premium deduction has priority over that of your monthly housing instalment. This is to ensure that you remain insured under HPS before you use your CPF to service the loan. You will receive a notification from the Board to top up your OA if the balance is not enough to pay the premium. If there are insufficient funds in my CPF Ordinary Account (OA), You will be informed to make payment via the following modes:

  • e-Cashier or e-Nets
  • AXS / SAM stations
  • Cash at any Singapore Post branches
  • Cheque to CPF Board

Your spouse may also authorise the Board to deduct his/her CPF OA savings to top up the difference in the premium if he/she is a joint owner.

If you do not pay your HPS premium, your HPS cover will lapse and you will not be covered under the scheme. You will need to re-apply for cover if you wish to be covered under HPS and your eligibility for coverage will be subject to your health condition at the point of the re-application.

How is the HPS premium calculated?

The premium is calculated based on the following factors:

  • Outstanding housing loan on the flat
  • Loan repayment period of the flat
  • Type of loan (concessionary or market rate)
  • Age and gender of the member

Premiums are generally higher for loans of larger amounts or longer repayment periods. The premiums would be lower for younger persons and females. You can calculate your HPS premium online using the Home Protection Scheme Premium Calculator.

What can I apply for Home Protection Scheme exemption?

You can apply for HPS exemption if you already have one or more of the following insurance policies:

  • Mortgage Reducing Term Assurance (MRTA)
  • Whole Life
  • Term Life
  • Endowments
  • Life Riders (must be attached to a basic policy)
  • Decreasing Term Rider

These policies must cover your outstanding housing loan up to the full term of the loan or 65 years old, whichever is earlier, in the event of death or permanent incapacity.

Your exemption from HPS may be revoked if any of the insurance policies used for the exemption is discontinued or altered. Subsequently, the Board would extend an HPS cover to you based on the declared percentage that you were exempted for, subject to the Board’s terms and conditions. If you wish to be exempted from HPS again, you will need to reapply for it.

In the past, you can apply to be exempted from HPS online or mail to the CPF board. This process is iterative and manual as the customer need to apply for HPS with CPF Board and CPF Board will email the insurers to request the policy information. The process is lengthened when the private insurance coverage is insufficient and CPF Board will have to inform the customer to top-up the coverage. This will lead to the customer having to liaise with the insurer to review the insurance coverage and re-submission to the CPF board.

With effect from 1 October 2021, any request for HPS Exemption using private insurance policy coverage would need to be made through the Insurer

Insurers will assess whether the current insurance coverage is sufficient for HPS exemption. Insurer will then submit the necessary documents to CPF Board on behalf of the customer for the processing of the exemption application. If the customer intends to use multiple policies from different Insurers, he/she must submit the HPS exemption application concurrently to all respective Insurers. CPF Board will inform the customer accordingly on the outcome of the application.

You need to request the “HPS Exemption Application Form” from your respective insurer and submit to them.

Following the exemption from HPS, you must continue to maintain your insurance policy coverage to remain exempted. If your coverage is lapsed or is altered, Insurers are required to inform CPF Board for an HPS cover to be issued.

You will get a full premium refund into your CPF Ordinary Account (OA) if the exemption application is received (by the Board) within one month from the issuance of the HPS cover. Otherwise, a pro-rated refund will be given to your CPF OA upon the termination of your HPS cover.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

  • Hi,

    I would like to know…

    My wife has passed on and the house was fully pay off (HPS fully covered) to CPF board. I don’t have any loan with Bank on this house now. I would like to know the breakdown of how much I have previously used on my CPF account for this house. Also, how much HPS insurance had paid to the CPF board. When I said paid to CPF, does it in a way of CASH term to the CPF Board and CPF has paid to my loan company which this case was DBS Bank? I am asking before, if I were to sell my current house, how much CASH return will be back to me.

    Can you help to advise, how to obtain that breakdown transaction from HPS to CPF? I do not see any info from CPF website and HDB officer told me the only way is CPF. CPF Board should have the database on that which is not be able to see it even myself.

    Thank you

    Leonard Koh

  • Helpful writing , I am thankful for the information – Does anyone know if my company can grab a sample IRS 8404 version to type on ?

  • You have to be insured under HPS if you are using your CPF savings to pay your monthly housing loan instalments on your HDB flat.

    This statement is not correct – you can always take up a mortgage insurance with a private insurer to cover this requirement.

  • Hi Team

    I am one soft ware engineer from on big softeare company . I have purchased flat with of 34 lacs through LIC. how to take house protection scheme

    Thanks Regards
    Anandhi

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